ITO, Ward 1(3), Jalna V. Shri Datta Ginning & Pressing Co-Op. Society Ltd., Jalna

ITA 343/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76348 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 04-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Capital asset; Wrong claim; Revised return
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.343/PN/2013 (ASSESSMENT YEAR : 2007-08) INCOME TAX OFFICER, WARD 1(3), JALNA. . APPELLANT VS. SHRI DATTA GINNING & PRESSING CO-OP. SOCIETY LTD., AT POST TEMBURNI, TQ. JAFRABAD, DIST. JALNA. PAN : AAAAD2691R . RESPONDENT DEPARTMENT BY : SHRI S. P. WALIMBE ASSESSEE BY : NONE DATE OF HEARING : 12-03-2014 DATE OF PRONOUNCEMENT : 20-03-2014 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), AURANGABAD DA TED 26.11.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 24.06.2010 PASSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2007-08. 2. ALTHOUGH, THE REVENUE HAS RAISED MULTIPLE GROUND S OF APPEAL BUT THE SOLITARY ISSUE INVOLVED ARISES FROM THE ACTION OF T HE CIT(A) IN DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)( C) OF THE ACT AMOUNTING TO RS.3,85,717/-. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE RESPON DENT-ASSESSEE IS A CO- OPERATIVE SOCIETY ENGAGED IN THE ACTIVITY OF COTTON GINNING AND PRESSING WHICH IS COMPRISED OF FARMERS FOR THEIR MUTUAL BENEFITS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 28.04.2008 DECLARING NIL INCOME ITA NO.343/PN/2013 A.Y. 2007-08 INTER-ALIA CLAIMING DEDUCTION U/S 80P(2) OF THE ACT AMOUNTING TO RS.18,90,774/-. THE COMPUTATION OF INCOME WAS BASE D ON A CAPITAL GAIN OF RS. 31,89,620/- EARNED ON SALE OF CAPITAL ASSET AND AFTER REDUCING THE BUSINESS LOSS OF RS.12,98,846/- THE NET INCOME WAS WORKED OUT AT RS.18,90,774/- WHICH WAS CLAIMED AS EXEMPT U/S 80P( 2) OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, ON BEING POINTED OUT, ASSESSEE FILED A REVISED RETURN DECLARING INCOME OF RS.18,90,770/- B ECAUSE THE INCOME BY WAY OF CAPITAL GAINS WAS NOT ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. THE ASSESSING OFFICER ASSESSED THE INCOME OF THE ASSESS EE AT RS.18,90,770/- AFTER DENYING THE DEDUCTION U/S 80P OF THE ACT. TH E SAID ASSESSMENT HAS BECOME FINAL THEREAFTER THE ASSESSING OFFICER HELD THE ASSESSEE GUILTY FOR CONCEALMENT OF INCOME ON ACCOUNT OF WRONG CLAIM OF DEDUCTION U/S 80P OF THE ACT WITH RESPECT TO THE INCOME BY WAY OF CAPITAL GA IN OF RS.18,90,770/-. THE CIT(A) HAS SINCE DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT, AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING, IT WAS NOTICED THAT NONE APPEARED ON BEHALF OF THE RESPONDENT-ASSESSEE IN SPITE OF SERVICE OF NOTI CE AND THEREFORE THE APPEAL IS TAKEN-UP FOR DISPOSAL AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE ON MERITS AND EX-PARTE QUA THE RESPONDENT-ASSESSEE IN TERMS OF RULE 25 OF THE APPELLATE TRIBUNAL RULES 1963. THE LEARNED DEPARTM ENTAL REPRESENTATIVE HAS SUPPORTED THE ACTION OF THE ASSESSING OFFICER BY PO INTING OUT THAT THE CLAIM OF DEDUCTION U/S 80P CLAIMED BY THE ASSESSEE ON INCOME BY WAY OF LONG TERM CAPITAL GAIN WAS CLEARLY WRONG AND THEREFORE THE PE NALTY U/S 271(1)(C) OF THE ACT WAS JUSTIFIABLY LEVIED. ACCORDING TO THE LEARN ED DEPARTMENTAL REPRESENTATIVE, THE CIT(A) ERRED IN DELETING THE PE NALTY. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS SETUP BY THE LEARNED DEPARTMENTAL REPRESENTATIVE AS ALSO THE ORDERS OF T HE AUTHORITIES BELOW. NO DOUBT THE ASSESSEE MADE A WRONG CLAIM OF DEDUCTION U/S 80P OF THE ACT IN THE ITA NO.343/PN/2013 A.Y. 2007-08 RETURN OF INCOME. SO HOWEVER, THE POINT TO BE NOTE D IS WHETHER A CLAIM MADE IN THE RETURN OF INCOME, WHICH IS FOUND NOT SUSTAIN ABLE IN LAW, WOULD BY ITSELF ATTRACT PENALTY U/S 271(1)(C) OF THE ACT OR NOT. I N THIS CONTEXT, WE MAY REPRODUCE HEREINAFTER CERTAIN FUNDAMENTAL FEATURES OF THE CLAIM NOTED BY THE CIT(A), AND WHICH ARE NOT IN DISPUTE :- (I) THE INCORRECT CLAIM OF DEDUCTION U/S. 80P IN T HE RETURN OF INCOME WAS ATTRIBUTABLE TO THE TAX CONSULTANT OF THE APPEL LANT SOCIETY; (II) THE INCORRECT DISALLOWANCE CLAIMED DOES NOT AT TRACT PENALTY U/S.271(1)(C) AS LAID DOWN BY HON'BLE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD.; (III) THE APPELLANT HAS DISCLOSED THE DETAILS OF IT S CLAIM OF DEDUCTION U/S.80P AND HENCE IT CANNOT BE SAID THAT THE APPELL ANT HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME. (IV) THE EXPLANATION OF THE APPELLANT IS FOUND TO B E BONAFIDE EXPLANATION. FURTHER THE APPELLANT HAS FULLY CO-OPE RATED WITH THE DEPARTMENT IN ACCEPTING THE MISTAKE OF WRONG CLAIM OF DEDUCTION AND IN PAYING DUE TAXES. 6. AS PER THE JUDGEMENT OF THE HONBLE SUPREME COU RT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD., (2010) 322 ITR 158 (SC) A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSEL F WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS LIABLE FOR PENALTY U/S 27 1(1)(C) OF THE ACT. QUITE CLEARLY, IN THE PRESENT CASE, NO PARTICULARS OF INC OME OR DETAILS OF THE CLAIM HAVE BEEN FOUND TO BE FALSE OR INCORRECT OR INACCUR ATE. IT IS MERELY A CASE WHERE A WRONG CLAIM OF DEDUCTION HAS BEEN MADE U/S 80P OF THE ACT, WHICH BY ITSELF WOULD NOT INVITE PENALTY U/S 271(1)(C) OF TH E ACT HAVING REGARD TO THE PARITY OF REASONING LAID DOWN BY THE HONBLE SUPREM E COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (SUPRA). MOREOVER, WE ALSO FIND THAT THE CIT(A) HAS APPRECIATED THE ATTENDANT FACTUAL ASPECT S WHICH LEAD TO MAKING OF A WRONG CLAIM AND SUCH A POSITION HAS NOT BEEN FOUN D TO BE LACKING IN BONA- FIDES. EVEN BEFORE US, THERE IS NO CHALLENGE TO TH E BONA-FIDES OF THE CLAIM MADE, THOUGH IT WAS FOUND TO BE UNSUSTAINABLE IN LA W IN THE COURSE OF ASSESSMENT PROCEEDINGS. IN OUR CONSIDERED OPINION, HAVING REGARD TO THE ENTIRE CONSPECTUS OF FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) MADE NO ITA NO.343/PN/2013 A.Y. 2007-08 MISTAKE IN DELETING THE PENALTY OF RS.3,85,717/- LE VIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. WE HEREBY AFFIRM THE ORD ER OF THE CIT(A). 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G. S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 20 TH MARCH, 2014 SUJEET/GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), AURANGABAD; 4) THE CIT, AURANGABAD; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE